Understanding Commercial Insurance Risks and Business Insurance Covers

If you own or manage a business, either large or small, you will require some type of insurance to protect your company against the various risks and potential multitude of claims, that your business will face.

Commercial insurance or Business insurance as it is commonly known, is a complicated area of underwriting and because all businesses are different, and face different risks depending upon the nature of the company, various packages and combined policy covers have been introduced by insurance companies and commercial broker schemes, to make the process easier.

An example of a small business insurance package which is commonly sold online is the Tradesman’s insurance package, which includes all elements of cover required by a small business or self employed trader such as basic liability covers and theft of tools.

Other small business insurance packages that are trade specific and can often be obtained online are available for shopkeepers, offices, surgeries, hotels and guest houses, restaurants, public houses and builders.

Large companies will be offered what is known as a commercial combined policy which has many different elements of cover which can be combined to make a bespoke policy for the enterprise. Most large companies will require some degree of risk assessment before the policy is underwritten, which may often include a visit to the business premises or site, and for this reason these types of larger business usually employ the services of specialist commercial insurance brokers.

Business Risks

The largest risk that a business faces is from liability to others, and the potential costs and damages a company could face if a claim was made against it.

All companies are required by law to have in place liability cover, called Employers liability insurance or EL, to protect their staff against all potential risks and accidents  while in the workplace.

Business liability insurance is usually sold as a package and will always include Public Liability, often just known as PL, which protects the company against claims from the public whilst on the business premises.

A further type of liability insurance called Product liability is also available to companies under a commercial liability policy which protects the company against claims made for design or manufacturing faults in the product.

Company directors can also protect themselves against liabilities with Directors and Officers insurance (D&O) cover.

Property Damage

Most business large and small will have premises that need protection against buildings perils such as fire and flood and commercial property insurance is available to cover all buildings insurance risks. Similarly commercial contents insurance for business premises is available which covers office and business equipment including files and data processing against the common perils. For companies that carry stock, this type of business contents insurance can be extended to cover risk such as deterioration and damage.

For the small businessman who works from home these covers are often available with strict limits of indemnity, as a bolt on to a standard home buildings and contents policy. This type of cover is often effective for self employed people with just a computer and a home office.

Business Contingency Cover

One of the largest problems faced by a business is that of how to continue in business should the worst occur, for example a fire that destroys the premises. In order to deal with this Insurance companies have devised a cover called ‘Business Interruption Insurance’. Based on your previous years annual turnover, this protection insurance covers your company against all losses caused by interruption to trading due to any of the perils mentioned on the policy and will pay out on a indemnified basis for the period of cover agreed in the policy. Most policies will also offer some type of alternative trading accommodation to enable you business to continue whilst the premises are being repaired.

Additional Commercial Risks

Because commercial insurance is designed to cover all classes of business, there are many various trade or business specific covers available which can be added to a combined policy. Examples of these covers include loss of licence to trade, glass cover, goods in transit cover, book debts, commercial vehicle insurance, hauliers cover, warehouse cover, engineering insurance and plant inspection services, and theft by employees.

Outside of most combined policies are additional risks more often sold under separate policy covers, that should be considered to protect your business against all eventualities.

Examples of these are, Commercial Legal Expenses insurance cover which protects the company against claims made by employees for unfair dismissal and allows you to bring cases against suppliers.

Various protection policies are also available for businesses including Keyman insurance which provides cover against the loss of key people within your organisation. Business mortgage protection provides a monthly payment for business premises should you suffer and accident or sickness. Group ASU policies are also available to protect your staff and employees.

Purchasing Business Cover

Purchasing commercial risks insurance can be a daunting experience for the uninitiated small business owner and unless the risks are straightforward and can be underwritten online, it is advisable for all companies to approach the services of a local or regional commercial insurance broker. Insurance Brokers will not only be able to assess the complete range of risks that your business is exposed to, and provide the correct levels of cover, they will more often than not have a unique local knowledge of the risks involved and will be able to negotiate premiums that reflect the nature of the risks. Furthermore, in the event of a claim, and as most businesses will be faced with claims at some point in their trading life-cycle, the broker will handle all the settlement negotiations with the insuring company and allow you to continue what you do best – running your business.

Commercial Insurance Quotes

If you operate or are responsible for any type of business entity or commercial enterprise, in order to obtain the right insurance for the company you will need to find and compare suitable commercial insurance quotes. A quote is an offer of certain defined insurance covers in a policy for a monetary price.

Quotations can be obtained from numerous sources including locally from specialist high street insurance brokers, over the phone from insurance companies or brokers, or from the many online companies and comparison sites offering all types of insurance cover.

A commercial insurance quote forms a legal offer and is the basis of the contract of insurance between the proposer and the underwriting company. The information you provide on the quotation form is used to calculate both the premium quoted and the levels of cover offered on a policy. The quote data a company provides will be used to complete the policy documents. It is therefore very important that when applying for commercial insurance quotes that the information you supply about your business activities is correct and truthful.

Most companies offering quotes will agree to honour the price offered for a period of thirty days or one month following its issue. When obtaining a quote, regardless of the source, ensure that you retain the reference number which will enable you to either take up the or recall and revise the offer at a later time. Prices offered can fluctuate and a premium offered one week may not be available the next.

Quotes and premiums can be obtained for all business types and all business and commercial risks for both business liability and property insurance, either separately or combined in what is known as a package.

Commercial property insurance will typically provide cover for buildings and contents of business premises of varying types and sizes. For example a shopkeeper would be interested in covering his glass shop front and shop stock whilst a small draughtsman business would require a price for covering the business office equipment. For this reason quotes for a business are often given by insurance companies for packaged policies that are property specific, such as shop insurance quotes or office insurance quotes.

When looking for cover search for companies that offer quotes for your particular type of building. Let property buildings only insurance quotes are available for landlords who just want to cover the buildings, fixtures and fittings. Equally commercial property tenants and lease-holders can obtain quotes that only cover the contents, stock or liabilities.

Liability quotes can be obtained with either combined property insurance packages or as a standalone quotation for individual business liabilities. The most popular liability products quoted for are public liability insurance, employers liability insurance, product liability insurance and professional indemnity insurance.

Commercial liability quotes are widely available online for most trades and professions. Packages often offer all risks cover and if you are looking online most systems allow you to pick and choose various liability coverage options

When comparing quotes online you will not have the assistance of a broker to advise you. It is vital therefore to ensure that you check that the levels of indemnity and covers offered are sufficient for your business, because levels of commercial insurance cover quoted for, can vary as often as the price.

How a Commercial Insurance Broker Can Help You

Insurance brokers have become increasingly more important today compared to many years back. Given the heavy loads of competition in the California insurance market, customers should be kept well-informed so that they won’t be led astray into getting frivolous deals. Most especially in the aspect of commercial insurance, entrepreneurs are usually better off with brokers beside them.

What is a Commercial Insurance?

Commercial insurance is just an insurance to protect businesses in the state. It is considered as one of the most vital investments for business operators. Depending on the specific type of commercial insurance, this security protects various aspects of the business. It can provide financial security in times of theft, liability, property damage, work-related employee or customer injury and even during times of business interruption. Those who have not secured insurance for their business are at risk of sudden financial depression. It has also been observed that uninsured businesses place the personal assets of the owner at risk.

Before setting out for an insurance hunt, make sure that you are already equipped with ample knowledge of what you really need. For example, you may be better with one specific type of commercial insurance, rather than having all forms of commercial insurance in one package. If you don’t have company vehicles for operating your business, you can do away with auto insurance and just go for property insurance instead. But you still need to know everything about these specific insurances because nobody is certain when your business might expand. Together with this growth is an expected change in insurance needs.

Looking For an Insurance Broker

Finding the right commercial insurance in California involves tapping the services of a trusted insurance broker who, as much as possible, is specializing in business insurance. It is important that you interview more than two brokers and check who among them makes you more at ease when it comes to dealing things. It is expected that he discusses the different options that surround commercial insurances.

As there are various classes of business insurance, your broker can guide you through the entire process. Using his expertise, he can easily recommend the most suitable plan for your immediate needs. A good place to start looking for brokers is the Internet. If not, search for them via networking organizations for local businesses. Your friends in the industry or business advisers may also refer you to seasoned brokers in the state.

Insurance brokers are in place to make it easier for business owners to get the right insurance. However, even with their ability, it may be difficult for some to get one most probably because of their company background. For example, if the business has already suffered some degree of loss in the past then it may be considered a high-risk entity. This means most insurers will back out from making any deals with you. Another reason for the increased difficulty in procuring commercial insurance is the owner’s history of making frequent claims, which easily makes him a liability. In addition, new businesses will surely have a harder time getting insured because of not having a proven history of business sustainability and strength compared to more established businesses. Still, business owners have higher chances of sealing the best deals with a broker nearby.

More About the Term Life Insurance Plans

There are several insurance plans that can suit the needs of every client. Term life insurance is coverage where a client pays a fixed premium rate during a specified period. The beneficiaries of the life insurance can only get the benefits paid if the insured person dies during the contract period. However, if the insured person survives the period of the contract, he can opt to let the coverage go, or he may continue to pay the premium and extend the contract period. The company can choose to include new terms and conditions to the contract if the client chooses to extend the contract period.

Term life insurance plans allow clients to pay premiums for a specified period, which is mostly up to 30 years. With this in mind, clients should consider their lifestyles to see if they are at risk of dying sooner than they think. Many older clients can consider taking short term life insurance to increase the chance that the insurance will be effective, because they do not have a long time to live. On the other hand, young clients can take long term insurance coverage, to make sure that their families get payment when sudden death occurs.

There is also a whole life insurance coverage which offers clients the opportunity of using their premiums as an investment option. This insurance type is known as flexible premium adjustable insurance. The client who opts to buy this insurance can use the premium he or she accrues, through the years to buy items or to borrow loans using it as collateral. The main factors which affect the use of this policy as an investment option is the length of the contract as well as the face value of the policy. The premiums which a client pays also affect the effective use of this insurance as an investment opportunity. A client should try using quote comparison, so that he gets the best quotes.

When getting whole life insurance coverage with adjustable premiums, a client should consider the time it will take before the policy can accrue cash value. Many insurance companies deduct the amount a client borrows against the policy from the death benefit pay out, if he does not repay the amount before his death. With this in mind, many clients would go for the policy which accrues cash value faster than the rest. Before getting into any contracts, a client should use quote comparison, to decide which insurance policy suits him or her best.